Insurance Blog

The Centers for Disease Control and Prevention (CDC) yesterday released new fatality estimates for the H1N1 influenza virus, also known as swine flu. Since the start of the 2009 H1N1 flu outbreak in April, there have been some 3,900 deaths, more than the 1,200 previously estimated, but significantly less than the 36,000 deaths each year attributed to seasonal flu. In the six months from April to October 17, 2009, the CDC puts the total number of swine flu cases at 22 million and the number of hospitalizations at 98,000. The Wall Street Journal Health blog ponders what these numbers might mean. For starters, it observes that there’s a lot of uncertainty around the figures because so many cases of swine flu go unreported. Indeed, the CDC itself says that estimating the number of individual flu cases in the U.S. is very challenging because many people with flu don’t seek medical […]

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When President Obama pledged to address medical malpractice liability concerns as part of healthcare reform, and directed the Department of Health and Human Services to move forward with incentives for states aimed at curbing lawsuits, insurer and doctor groups welcomed the step but cautioned the devil would be in the details of the plan. The details of House speaker Nancy Pelosi’s 1,990-page healthcare bill that passed Saturday on a 220-215 vote underscores the need for that cautionary note. A provision in the bill does establish an incentive program for states to adopt and implement alternatives to medical liability litigation, BUT a state is not eligible for incentive payments if it puts a law on the books that limits attorney fees or imposes caps on damages. A November 6 OpEd in the Washington Times calls the provision a poison pill:
“Fee limits or damage caps are the two most popular lawsuit reforms […]

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A Chinese drywall symposium hosted by the University of Florida College of Engineering will be held in Tampa, Florida on Thursday and Friday (November 5 and 6) of this week. The event will bring together researchers from the primary state and federal agencies to present their findings on technical topics such as materials analysis, emissions testing, exposure assessment and toxicology, remediation and repair. Florida Senator Bill Nelson is scheduled to give the keynote speech on Friday. A preliminary report from the Consumer Product Safety Commission (CPSC) late last week found that while Chinese drywall emits higher levels of sulfur gases and strontium than drywall manufactured in the United States, there is no evidence that the emissions are linked to health problems and metal corrosion. Indoor air testing of 10 homes in Florida and Louisiana was conducted for the study and an analysis of 50 additional homes is underway with the […]

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Today’s headlines are full of promise on U.S. healthcare reform after the Senate Finance Committee’s milestone vote in favor of a bill crafted by Senator Max Baucus (D-MT) that would overhaul the healthcare system. It’s worth noting that this bill does not address medical liability reform. Last week the Congressional Budget Office (CBO) estimated that implementing a typical package of medical liability reform proposals nationwide would reduce total U.S. healthcare spending by about 0.5 percent (about $11 billion in 2009). This figure includes some 0.2 percent in savings from lower direct spending on medical liability premiums and an additional 0.3 percent in indirect savings from slightly less utilization of healthcare services. Overall, enacting medical liability reform proposals would reduce federal government budget deficits by roughly $54 billion over the next 10 years, according to CBO’s analysis. This is something to keep in mind as the healthcare reform debate moves to […]

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There have been a number of media stories on the imported drywall (otherwise known as Chinese drywall) issue in recent days. Here’s a quick synopsis. A story in today’s New York Times by Leslie Wayne reports that hundreds of drywall-related lawsuits are piling up in state and federal courts and a consolidated class action is moving forward in Federal District Court in Louisiana that will begin hearing cases in January. Meanwhile, an article in today’s Miami Herald by Beatrice Garcia and Nirvi Shah underscores the point that homeowners are unlikely to find coverage for Chinese drywall issues under homeowners insurance policies because of exclusions for pollution, contamination damage or problems stemming from construction defect. A September 28 article in the Baton Rouge Advocate by Cain Burdeau reported on how Chinese drywall manufacturers may ignore drywall-related lawsuits pending in U.S. courts. A recent report by Swiss Re provides an excellent overview […]

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President Barack Obama’s pledge to address medical malpractice liability concerns in his speech to Congress on healthcare Wednesday night has prompted a lot of headlines. In his speech the president proposed moving forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. He directed the Department of Health and Human Services to move forward on the initiative with pilot projects at the state level. “I don’t believe malpractice reform is a silver bullet, but I’ve talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs,” the president said. An article in today’s Wall Street Journal states that programs underway in various states could provide a template for the administration’s initiative. Meanwhile, the New York Times Prescriptions blog cites insurer and doctors’ groups saying the devil is in the details of the plan. Responding to the […]

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Reports on the H1N1 virus continuing to cause illness, hospitalizations and deaths in the U.S. during the normally flu-free summer months and newly issued vaccination guidelines from the Centers for Disease Control and Prevention (CDC) are raising concerns on pandemic risk. This may prove an area of future growth for the capital markets as life insurers increasingly look to alternative risk financing as a way to raise additional capital and transfer pandemic risk. For example a new report from Swiss Re suggests that securitizations of extreme mortality risk will continue to expand as more large global life insurers and reinsurers adopt these tools to hedge exposure to pandemic risk. Swiss Re notes that the combined volume of extreme mortality bonds issued so far is $2.2 billion, a miniscule amount compared to the face amount of mortality risk insured globally. “It is difficult to estimate precisely the market potential for this […]

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Employers face an average increase of 10.5 percent in healthcare costs in the next 12 months, consistent with a year ago, but still in the double digits. A survey by Aon Consulting of more than 60 leading healthcare insurers, representing more than 100 million insured individuals, projects that healthcare costs will increase by 10.4 percent for HMOs, 10.4 percent for POS plans, 10.7 percent for PPOs and 10.5 percent for CDH plans. While these increases are slightly lower than one year ago, Aon says the sluggish economy is creating a worse situation for many employers and employees with lower wage increases, and in some cases, salary freezes. Wellness and health promotion initiatives are critical in the next phase of lowering the medical trend rate, according to Aon. For more on this story, check out an August 25 online article at Business Insurance by Joanne Wojcik. Check out additional I.I.I. facts […]

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Economic factors have likely played a role in the 10 percent decline in the total number of workplace fatalities recorded in the United States in 2008, according to a preliminary report from the Bureau of Labor Statistics (BLS). BLS said preliminary figures indicate a total of 5,071 workplace fatalities were recorded in 2008 – the smallest annual preliminary total since 1992 – down from 5,657 in 2007. Based on these preliminary counts, the rate of fatal injury for U.S. workers in 2008 was 3.6 fatal work injuries per 100,000 full-time equivalent workers, down from the final rate of 4.0 in 2007. BLS cited the impact of economic factors, noting that average hours worked at the national level fell by one percent in 2008. Some industries that have historically accounted for a significant share of worker fatalities, such as construction, experienced larger declines in employment or hours worked. Workplace fatalities in […]

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It’s well-documented that tort reforms have had a positive impact in the medical malpractice environment by reducing the number of claims filed. An opinion piece in yesterday’s Washington Examiner by Texas Governor Rick Perry makes the case for why tort reform should be part of healthcare reform. Governor Perry describes the healthcare crisis that mired Texas back in 2003 when increasing litigiousness led doctors and their insurers to leave the state. He then describes how the Texas legislature turned the situation around by passing medical malpractice reforms – such as a $250,000 cap on non-economic damages – that protected the patient but also shielded doctors and hospitals from costly lawsuits. Earlier in June President Barack Obama told the annual meeting of the American Medical Association (AMA): “I’m not advocating caps on malpractice awards, which I personally believe can be unfair to people who’ve been wrongfully harmed, but I do think […]

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